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Brussels, 4 August 1999

Commission authorises acquisition of Sogerail (France) by British Steel (UK)

The European Commission has authorised, under Article 66 of the ECSC Treaty, the acquisition of Sogerail by British Steel plc. This operation will make British Steel the largest producer of rails in the European Union and signals Usinor's intention to cease the production of carbon steel long products and concentrate on the production of flat products and stainless steel.

British Steel plc is a major integrated steel maker with production facilities in Europe and in the United States of America. It makes a wide variety of hot and cold rolled steel products. It manufactures rails at its heavy section mill in Workington (UK), including rails for public transport. Sogerail, a wholly subsidiary of Usinor, is one of largest European producers of rails. Its production facilities are all in France.

After the acquisition of Sogerail, British Steel will have a share of about 30% of the European Economic Area (EEA) rail market. It will face the competition of other important producers of rails based in the EEA such as Voest Alpine, Thyssen Krupp and Lucchini, each with market shares of between 10% and 25%, and from producers based Central and Eastern Europe, which in 1998 accounted for about 10% of the EEA consumption.

As the proposed operation will not give the new entity the power to evade the competition rules of ECSC Treaty, it fulfils the conditions for authorisation set out in the Article 66(2) of the ECSC Treaty and the Commission has accordingly authorised it.

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